Canada Country Risk Report

Providing comprehensive data and in-depth analysis of political, financial and economic risk.

Report includes: BMI's Core Views, 10-year Forecasts, BMI's Economic Risk Index, Political Stability and Risk Index, Long-term Political Outlook, Operational Risk Index, SWOT Analysis and Structural Economic Sections

Why you should buy this report

  • Understand and measure the political, business environment and operational risks to your company
  • Gain insight on emerging trends that could support, strengthen or disrupt your activities in the market
  • Benefit from 10-year macroeconomic forecasts and insight into the structural characteristics of the economy
  • Get the long-term political outlook and explore possible scenarios for change
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Canada Country Risk Report
Product Price
$1,195.00

Core Views

  • The negative impact of low oil prices on fixed investment in Canada will persist in 2016 to a greater extent than we had previously projected, prompting us to revise down our real GDP growth forecast for this year.

  • Expansionary fiscal measures outlined in the 2016 Budget on March 22 will see a significant widening of Canada's federal government budget deficit over the next two years. However, even though we see government debt climbing, it will remain very low by G7 standards, with only limited fallout for future borrowing costs.

  • Canada's governing Liberal party will continue to enjoy strong popular support as it proceeds with its socially-minded reform agenda at a time when the economy will continue recover gradually.

Key Forecast Changes

  • The release of the Liberal government's 2016 budget has seen us revise our fiscal projections. We now see the federal budget deficit widening from 0.1% of GDP in 2015 to 1.3% of GDP in 2016 and peak at 1.4% of GDP in 2017. This compares with a peak deficit of 0.9% of GDP in 2018, which we had previously been forecasting.

Key Risks

  • High household leverage and continued housing price growth could lead to a crash in the real estate sector and trigger a recession.

  • Continued downside in global oil prices will take a toll on Canada's economy and could depress business confidence.

Macroeconomic Forecasts (Canada 2014-2017)
Indicator 2014 2015e 2016f 2017f
e/f=BMI estimates/forecasts. Source: National Sources/BMI
Real GDP growth, % y-o-y 2.5 1.2 1.4 2.0
Nominal GDP, USDbn 1,761.5 1,530.4 1,495.3 1,625.1
Consumer price inflation, % y-o-y, eop 1.5 1.6 2.0 2.2
Exchange rate CAD/USD, eop 1.16 1.38 1.32 1.30
Budget balance, % of GDP 0.1 -0.2 -1.4 -1.4
Current account balance, % of GDP -2.3 -3.4 -3.0 -2.6
Executive Summary
5
Core Views
5
Major Forecast Changes
5
Key Risks
5
Chapter 1: Economic Outlook
7
SWOT Analysis
7
BMI Economic Risk Index
7
Economic Growth Outlook
8
Strong Exports Will See Economic Growth Accelerate
8
TABLE: GDP BY EXPENDITURE GROWTH FORECASTS
8
GDP By Expenditure Outlook
9
TABLE: GDP GROWTH FORECASTS
10
TABLE: PRIVATE CONSUMPTION FORECASTS
10
TABLE: GOVERNMENT CONSUMPTION FORECASTS
10
TABLE: FIXED INVESTMENT FORECASTS
10
TABLE: NET EXPORTS FORECASTS
10
TABLE: REAL GDP GROWTH FORECASTS, %
11
Fiscal Policy And Public Debt Outlook
11
Expansionary Policy Will See Fiscal Targets Missed
11
Structural Fiscal Position
12
TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES
13
External Trade And Investment Outlook
14
Manufacturing Exports Will Shrink Current Account Deficit
14
Outlook On External Position
15
TABLE: CAPITAL & FINANCIAL ACCOUNT BALANCE
15
TABLE: TOP 5 GOODS IMPORTS IN 2014
16
TABLE: TOP 5 GOODS EXPORTS IN 2014
16
TABLE: EXTERNAL COMPETITIVENESS INDICATORS
17
Monetary Policy
17
Gradual Hiking Cycle Will Begin In 2017
17
Monetary Policy Framework
19
Currency Forecast
20
CAD: Additional Downside Will Be Limited Beyond Early 2016
20
TABLE: BMI CURRENCY FORECAST
20
Chapter 2: 10-Year Forecast
23
The Canadian Economy To 2025
23
Structural Factors Will Constrain Growth
23
TABLE: LONG-TERM MACROECONOMIC FORECASTS
23
Chapter 3: Political Outlook
25
SWOT Analysis
25
BMI Political Risk Index
25
Domestic Politics
26
Challenging Policy Environment Amid Busy Reform Agenda
26
TABLE: POLITICAL OVERVIEW
26
TABLE: LIBERAL PARTY CAMPAIGN PLATFORM - ECONOMY & TAXES
27
TABLE: LIBERAL PARTY CAMPAIGN PLATFORM - SECURITY & TERRORISM
27
TABLE: LIBERAL PARTY CAMPAIGN PLATFORM - FOREIGN AFFAIRS & DEFENCE
28
TABLE: LIBERAL PARTY CAMPAIGN PLATFORM - ENERGY & ENVIRONMENT
28
TABLE: LIBERAL PARTY CAMPAIGN PLATFORM - INFRASTRUCTURE
29
TABLE: LIBERAL PARTY CAMPAIGN PLATFORM - ABORIGINAL ISSUES
29
Long-Term Political Outlook
29
Strong Foundation, But Some Challenges From Within
29
Chapter 4: BMI Global Macro Outlook
31
Global Macro Outlook
31
Unfinished Business In 2016
31
TABLE: GLOBAL ASSUMPTIONS
31
TABLE: DEVELOPED STATES, REAL GDP GROWTH, %
32
TABLE: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
32
TABLE: EMERGING MARKETS, REAL GDP GROWTH, %
33
TABLE: CANADA - MACROECONOMIC DATA & FORECASTS
35

Assess your risk exposure in Canada with our 100% independent forecasts assessing the pace and stability of this key market. Backed by trusted data from BMI Research's 52 million data point economic forecast model, this report will allow you to measure political, economic, business environment and operational risks in Canada with confidence.

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